Thursday, August 20, 2009

Individual Investors Get Spooked

Individual investor bullish sentiment, as reported by the American Association of Individual Investors, saw a decline of nearly 17 percentage points. The bullish sentiment level was reported at 34.07% versus last week's level of 51%. The market action on Friday and Monday that saw the S&P 500 Index decline nearly 3.3% may have spooked individual investors.

This sentiment reading is a volatile one and looking at an 8-period average of the reading will smooth out some of this weekly volatility. In that regard, the 8-period moving average actually ticked higher to 39.3% versus the average last week of 38.6%. The bull/bear spread turned negative at -6% versus a positive 18% last week.

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